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Friday 5 November 2021

21-294MR ASIC releases guidance and examples on records of advice

ASIC has today released an information sheet on records of advice (ROA) and three ROA examples to provide clarity to financial advisers and advice licensees on their obligations when using ROAs to provide personal advice to retail clients.

INFO 266 FAQs: Records of Advice answers frequently asked questions (FAQs) about ROAs, including questions about their usage, preparation and record keeping. It explains four exemptions from providing a statement of advice and covers the meaning of ‘significantly different’ (under the law) when providing personal advice in a further advice situation.

‘This is the first of ASIC’s initiatives developed in response to the financial advice industry’s recent feedback on our consultation to improve consumers’ access to affordable advice. We expect this practical guidance and information will provide clarity and certainty to financial advisers about when and how they can use ROAs,’ ASIC Commissioner Danielle Press said.

INFO 266 also addresses some common misconceptions around ROAs. The ROA examples, released alongside INFO 266, are annotated to help advisers understand the relevant requirements under the Corporations Act 2001.

This guidance follows ASIC’s recent release of an Example Record of Advice (ROA): COVID-19 relief measure that can be used when providing advice under the temporary relief ASIC Corporations (COVID-19—Advice-related Relief) Instrument 2021/268 until 15 April 2022.

ASIC undertook targeted consultation on INFO 266 and the example ROAs and received helpful and timely feedback from industry. ASIC also consulted the Financial Adviser Standards and Ethics Authority (FASEA) on the ROA examples and welcomes FASEA’s confirmation that they are consistent with advisers’ obligations under the FASEA Financial Planners and Advisers Code of Ethics.

In developing INFO 266 and the ROA examples, ASIC considered the advice industry’s response to recent consultations, including Consultation Paper 332 Promoting access to affordable advice for consumers (CP 332) and the roundtable discussions that followed. Industry asked for shorter, simpler and more user-friendly regulatory guidance and practical examples from ASIC. Responses from CP 332 indicated that greater use of ROAs would decrease the cost and time of delivering advice.

‘ASIC is committed to supporting the advice industry in its efforts to ensure everyday Australians can access quality advice at a reasonable price. We will continue to engage with industry and prioritise initiatives that address its concerns about cost and regulatory uncertainty,’ Ms Press said.

ASIC considers INFO 266 and the ROA examples can assist industry participants in providing good-quality, affordable personal advice to consumers.

Background

In November 2020, ASIC released CP 332 to seek input from financial advice industry participants and stakeholders to understand the issues and impediments impacting the supply of good quality affordable personal advice. ASIC sought input on the practical steps that can be taken by ASIC and the industry to improve consumer access to quality personal advice (20-285MR).

ASIC received an unprecedented 466 submissions from the industry and relevant stakeholders. In April 2021, ASIC held roundtables to discuss the key issues raised in the submissions to CP 332 and to consider potential solutions. For more information, see a summary of industry response.

For the latest information about regulatory issues impacting the financial advice industry as a result of the COVID-19 pandemic, including the recently released example ROA, visit ASIC’s COVID-19 information for financial advisers and advice licensees.

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Last updated: 15/11/2021 08:51